POLITICAL PARTY POOPER

WE WON'T BE SAFE WHILE POLITICAL PARTIES ARE LEGAL

GOVERNMENT CANNOT FIX THIS

Posted by politicalpartypooper on February 4, 2009

If you are having a good day, you may not want to read this post.

If, like me, your day is just like any other day, feel free to proceed.

I have some bad news for America.  It’s not something a stimulus package can fix, and it more than likely played a hand in causing our current economic crisis.  This bad news comes from my personal daily experiences, but I talk with many of my colleagues, and all of their statistics are similar.

As a Financial adviser, I meet with normal people every day concerning their financial needs and plans.  In my travels, I have gathered some startling statistics.  Pay attention.

Nine out of ten people cannot answer the question, “How much after-tax income do you spend on average every month?” with any accuracy.  Out of one hundred people, only seven can tell me what the combined total is for their home mortgage, cell phones, and car payments within fifty dollars.  Only three out of one hundred have an adequately funded emergency stash.  Twelve in one hundred have “something” they call an emergency fund that is vastly underfunded.

Eighty-nine out of one hundred have no set retirement plan.  Keep in mind that amongst these, many have a 401k plan through work, but have no idea how much to save for retirement.  Amongst the business owners I meet with, fully five out of ten have no health insurance whatsoever.  Four out of those five have been without health insurance for more than two years.

Eighty two percent of the people I meet with have too little life insurance.  Forty percent have none at all.  How many of those actually fix that situation when I bring it to their attention?  One in four.  That leaves the other three happily hanging over a cliff waiting for disaster to strike, and impoverish their families.

Of the people I meet, one in three is spending more than they earn.  Of those who are spending more, one in two did not realize they were before they met me.  Which leads to the question, “How can you not know?”

The Senate is churning a stimulus package designed to spur job growth, and consumer spending.  I have news for our government.  There is nothing left to spend.  People are tapped out.  Giving them money so that they will spend it will not work, and will have no lasting impact on the economy.

We are in need of a new recipe, of reduced consumer spending, and increased frugality.  People haven’t stopped spending because they are afraid.  They’ve stopped spending because they have nothing to spend with.  Credit cards are filled up, and banks aren’t loaning money.  Homes have little to no equity.  Individuals have no money and no business spending the little they have left over.

It’s time for America to bite the bullet.  This will hurt, a lot, but it’s necessary.  We cannot continue being the consumer society that we were.    Creating jobs will help, but it will not turn the overall economy around very quickly.  We have a national virus, and it’s deadly.   Our government cannot fix this.   The quality of our lives depends upon our personal decisions from this point forward.

I did mine a long time ago, so I am going to encourage you to do a budget, not to control spending, but to know what is being spent.  I am going to encourage you to take ten percent of your wages, and save them in a money market or savings account until you have at least three months of wages socked away.  If you cannot do this, then make arrangements with your creditors so that you can.  Right now, creditors are very willing to help you.  They will make arrangements with you that will not hurt your credit rating, and will allow you to save that ten percent.  You should not change arrangements with any creditor who will harm your credit rating.  This isn’t optional if you want any kind of financial future.  Those statistics do not lie.  Chances are, you are perpetually teetering on the edge of disaster.  There are plenty of creditors who will work with you.  Take advantage of that.

There is hope, but not much time.  If we “fix” our economy this time without doing the hard work of saving, the next crisis will bury us.  You know we need breathing room.  You need it, too.  Give yourself a break, and save it.  Our nation depends on it.

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